At a sustainability conference this fall, the head of the U.S. General Services Administration (GSA), Martha Johnson, observed that the agency may have to completely stop new construction of federal buildings if a U.S. House of Representatives budget proposal for 2012 becomes a reality. To put it mildly, this is very disappointing news for architects.
The GSA has been feeling the pinch for some time. According to the Federal Times, GSA funding for new construction has already plummeted 91 percent, from $894 million in 2010 to $82 million in 2011.
For 2012, the House Appropriations Committee has proposed nothing for new construction. Yes, you read that right: Zero. And this is despite the fact that material and labor costs are at historic lows, making it a great time to build. The Senate budget is a bit more generous toward new construction, allocating $280 million. The president, in contrast to both, wants $840 million.
Advocates of Keynesian economics should pause briefly before praising the president’s efforts to stimulate the building design and construction industries, considering that the executive branch’s proposal for 2012 is still lower than what the budget was in 2010.
And fans of small government should take a good long pause before condemning the president as a wanton spendthrift, given that the administration already has enacted major cutbacks where federal property is concerned—and the resulting savings outnumber the proposed expenses on new construction by a factor of about 10 to one.
Last year, the president ordered federal agencies to reduce building-lease and -maintenance costs by $8 billion by the end of fiscal 2012. The closure and consolidation of military facilities accounts for $5 billion of the cuts. As for the rest, each agency developed its own plan, using such cost-saving measures as energy-efficiency improvements, lease renegotiations, office consolidations, and work-at-home policies. In addition, some properties will be reassigned to agencies that need more space; others will be gifted to municipalities, schools, and hospitals; and some will be sold.
The government currently spends $19 billion a year on a stock of some 1.2 million properties, which makes it far and away the nation’s largest landlord. With such an enormous portfolio, it’s fantastic to see the GSA and other agencies now taking steps toward efficiencies that have become standard in the private sector.
But what looks like efficiency to some people feels excruciatingly painful to others. “We … are having our stomach stapled,” GSA administrator Johnson said, in a moment of considerable candor, to attendees at the aforementioned conference.
While the GSA loses weight, developers have the chance to gobble up some seriously prime real estate, in major markets and at recessionary prices. An inventory commissioned during the George W. Bush administration notes 14,000 vacant and 55,000 underutilized government structures just waiting for private investment.
Now, selling and leasing vacant and underutilized public properties is most likely a good thing, but there are ways to be smart about it. Is it wise to unload so much real estate right now, with the market still shaky? The government might see a better return in a couple of years, after the economy bounces back. Transfers of public wealth to private hands should be mutually beneficial, and taxpayers shouldn’t lose money just because Congress is in a rush to tidy its balance sheet.
Two examples of this public-to-private transfer can be found in Washington, D.C. Here, developers are eyeing an abandoned Art Deco heating plant on a two-acre GSA property next door to the Georgetown Four Seasons Hotel (a very prime location, to say the least, in one of the busiest and trendiest parts of town). Also, GSA Public Buildings Service commissioner Robert Peck is considering bids for the Old Post Office, located in the heart of the downtown Federal Triangle. This 1899 Richardsonian Romanesque landmark currently houses the National Endowment for the Arts, the National Endowment for the Humanities, and the Advisory Council on Historic Preservation—plus a food pavilion and shops. At the moment, a team fronted by Donald Trump wants to convert the building into a 300-room luxury hotel. Peck will pick a winner early next year.
Will all this austerity lead to an economic lift for the profession? According to the more-conservative theories of economics, as the government taxes less and spends less, the private sector should then be free to step in and take up the slack. This, I guess, would be an adequate test of that theory.
Commissioner Peck won’t be hiring any architects, but the Donald will. Or at least that’s what the experiment should prove. Let’s hope it’s right, because right now, any job would be an improvement.